Chancellor unveils sweeping tax cuts and investment in Autumn Statement

Chancellor unveils sweeping tax cuts and investment in Autumn Statement

Chancellor Jeremy Hunt has announced a slew of financial measures aimed at bolstering the economy by aiding businesses, pensioners, the hospitality industry, and the self-employed.

In a bid to alleviate the cost of living, 27 million workers will benefit from a 2% cut in national insurance contributions, resulting in an annual saving of £450. The self-employed will see the abolition of Class 2 contributions, providing an average saving of £192 per annum.

State pensions will see an 8.5% increase in alignment with wage growth, and benefits are set to rise by 6.7%. In a gesture that may signal an upcoming general election, all alcohol duties will remain frozen until August next year.

The Chancellor also plans to sell off the taxpayer’s remaining shares in the former Royal Bank of Scotland through a NatWest retail share offer, invoking the spirit of the 1980s British Gas privatisation and aiming to stir public investment.

In a major push towards innovation, Mr Hunt has earmarked £500 million to establish centres to position the UK as “an AI powerhouse”.

To combat low productivity, Mr Hunt has unveiled a £20 billion investment strategy that doesn’t hinge on additional borrowing. This includes £975m for aerospace, £520m for life sciences, and £960m for green industry firms, with the anticipation of drawing in £2bn of additional investment yearly over the next decade.

Furthermore, financial incentives for Investment Zones and tax reliefs for Freeports have been doubled to ten years, while the “full expensing” measure has been extended to 2026, all in a concerted effort to bolster business investment by approximately 1% of GDP.

On the fiscal front, Mr Hunt highlighted the government’s success in halving inflation within a year and presented a forecast for economic growth, albeit at a slower pace than previously anticipated. However, borrowing projections remain largely unchanged from earlier estimates, despite the new fiscal policies.

In a preliminary response to the Chancellor’s Autumn Statement, Scottish Retail Consortium director David Lonsdale said: “The Chancellor has flubbed the chance to freeze the business rate.

“This short-sighted decision means the medium-sized and larger retailers across the UK who underpin the vitality of our town and city centres and employ the vast majority of retail workers are now staring down the barrel of a hefty £540m hike in their business rates bills from next Spring.

“A hike of this magnitude will put upward pressure on shop prices and undermine efforts to rejuvenate high streets and retail destinations. This misstep is the antithesis of the Prime Minister’s anti-inflation strategy and recently unveiled long term plan for towns.

“Hopefully, the Scottish Government’s Finance Secretary will take a more enlightened approach and go further and freeze the business rate or at least blunt any uplift in next month’s Scottish Budget.”

On retail, hospitality, and leisure sectors’ rates relief, Mr Lonsdale added: “Last year shops and hospitality businesses here in Scotland missed out on the rates relief available to their counterparts in England and Wales.

“With relief for retail, hospitality and leisure sectors in England being extended temporarily once again this time it is imperative that the Finance Secretary ensures a similar rates discount applies equally in Scotland.”

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